Although growth has eased from the five-month high in July, permanent placements remained strong in August, with temp billings also rising but at the slowest pace since May. However, employers are facing challenges filling vacancies. The survey found permanent candidates were in particularly short supply, with the availability of suitable staff falling again last month.

Drawing on original survey data provided by recruitment consultancies, August’s Report on Jobs indicated candidate shortages is continuing to fuel a strong pay growth for both permanent and temp staff.

Vacancies were strongest in the engineering sector, while hotel & catering roles saw the slowest growth. Nursing/medial/care was the most sought-after sector for temp workers in August, followed closely by engineering. Meanwhile, Morgan McKinley’s London Employment Monitor showed an 18% increase in City job opportunities, with active jobseekers in the City also up 27%.

Summary

• The demand for staff increases at fastest pace since April 1998
• Growth of staff appointments remains marked, despite easing
• Candidate shortages fuel strong pay growth
• All four regions monitored by the survey saw an increase in August

The Regions

Each of the four English regions covered by the survey saw increased placements in August with the sharpest growth in the South.

Public/Private Sector

The Demand for staff continued to rise at a considerably stronger rate in the private sector than in the public sector during the latest survey period.

Staff Categories

• Engineering workers saw the strongest expansion of vacancies
• Hotel & Catering roles registered the slowest growth
• Nursing/Medical/Care was the most sought-after category for temp workers in August, closely followed by Engineering
• The slowest growth was signalled for Executive/Professional workers

Kevin Green, CEO at REC

“It’s more great news for people looking for work this month, as we see more people being placed into jobs across all regions and sectors including construction, IT and engineering.

“The jobs market is often criticised for being London-centric but our data shows that rates of growth for both permanent starting salaries and temp pay rates are faster in the South, Midlands and North this month. Recruiters tell us that the driver behind this increase is the competition to attract and retain the skilled people outside London.

“While immigration has increased according to government figures, this clearly has had little impact on the jobs market. As skills shortages increase and employers struggle to find the people they need, politicians from all parties should focus on ensuring that we have a visa and immigration regime that supports UK businesses.”

Bernard Brown, Partner and Head of Business Services at KPMG

“Just when it seemed the UK’s economy had definitely turned a corner, a couple of warning shots have been fired across the bows of British business to suggest that everything is not quite ‘ship shape’. Jobs are still being offered, and are still sought after, but today’s figures show that permanent and temporary placements have eased in recent weeks. It may be down to holiday season, yet with these figures following the latest manufacturing output data which also revealed slower growth, it wouldn’t be surprising if the confidence expressed earlier in the year is reaching a peak.

“The problem is exacerbated by the fact that employers still cannot find staff with the right skill set. Their desperation to fill recruitment holes is leading to continued wage growth, which is creating a market that is both unsustainable and unrealistic. With vacancy growth reaching its highest since the survey began, I believe that the nervousness in the marketplace is more about the consequences of investing in the wrong people, than it is about spending money in an attempt to recruit the best talent. It’s a conundrum British business will have to solve quickly because if the job market stagnates the wider impact on performance will end up harming productivity.”